Broadridge Professional Services
T+1 INTERNATIONAL OFFERING

September 2023

Executive Summary
The shift to a T+1 trade settlement cycle represents a critical step for the financial services industry at a time when markets are changing and accelerating atpace. However, for individual firms, the compression of the settlement cycle to 24 hours will also create significant challenges and potential new costs.
T+1 presents firms with a golden opportunity to enhance their post-trade processing capabilities for long term competitive advantage•There is significant opportunity fororganisations to use T+1 compliance asa driver for top and bottom-line growth•

Solutions are available today that enableorganisations to address inefficiencies
and prepare for T+1•

Embed “operational excellence” as a corecompetency for long-term competitive
advantage•

Our Client Service Model gives you accessto deep Tech and Ops industry domain
expertise••

Our “accelerators” enable us to uncover
meaningful insights quickly••

Our position within the industry value chain•

We know Post Trade better than anyone•

Our experience helping peers solve thesame problems•

Many organisations have not carriedout a comprehensive operational
review of their post trade environment
T+1 Trade Settlement will amplify thefinancial impact of operational
inefficiencies
The impact of T+1 is highly complex
and must be analyzed at a granularlevel

Are you ready to eliminate a full day from your settlement process? Broadridge's experts can help you navigate the move to T+1 and prepare for next.
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CONFIDENTIAL INFORMATION|© 20232

Broadridge Preparation for T+1
Across all key solutions we have studied the implications of T+1 and we are confident our systems are ready for thechange and will support our clients
BROADRIDGE ACTIVITIES TO DATE▪

Analyzed all applications and processes to identify all areas effected by the change to T+1▪

Completed documentation of requirements to address all identified effected areas▪

Currently completing required coding changes▪

Hold regular client working group meetings to keep clients abreast of industry developments and Broadridge progress▪

We have analyzed to-date the impacts of US T+1 on international - for example, no core changes required from a technical perspectiveTESTING▪

Completed the build of dedicated T+1 test regions to connect to DTC and CDS for industry testing▪

Currently regression testing all coding changes in preparation for industry testing▪

Preparing test scripts

As we prepare for T+1, we have an opportunity to future-proof our product and technology investments
and address the challenges of an eventual move to same-day, real-time, or intraday settlements.
|CONFIDENTIAL INFORMATION|© 2023

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US Industry Testing ScheduleMay 2023 – May 2024
Client Testing

US T+1 TIMELINEMay 2023 –August 2023
ClientConnectivity andUAT *(Broadridge)

Analysis & Requirements Completed
Test Streams 8 & 9 Build & Shakeout completed
June 2023 – May 2023
Broadridge Analysis,Development & QA Testing**

Q2 22

Q3 22

Q4 22

Q1 23

January 2023 – April 2023
Functional Positive T1Testing

General Notes:
1. Migration transition over US 3-day weekend in May 2024 (Memorial Day Holiday)

Q2 23

June 2023
Connectivity to DTCC T1
Test Region(Projected)

2.

CDS, Fundserv and OCC Test Plan & Dates pending

3.

Application testing based on QA release schedule *4.

Majority of Development and QA will be completed by April. Minor additional changes will be available by June 2023 **|Q3 23

May 28, 2024
Industry Go-Live
August 2023 – May 2024
Industry Testing

Q4 23

Q1 24

Q2 24

December 2023
Client Checkpoint

February 2024
Client Checkpoint

April 2024
Client ReadinessAttestations Checkpoint

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T+1 Global Adoption
T+1 Continues to evolve around the globe requiring further focus and investment within your global operating model

T+1 the shortening of the settlement cycle from T+2 in the US, Canada and Mexico already scheduled in 2024 with further markets trending towards shorter settlement
cycles across Europe and Asia.

20232024

We are here

Aug 24th, 2023

May 28th, 2024

Dec 2024

Philippines Migrates fromT+3 to T+2

Mexico T+2 to T+1Awaiting Confirmation

UK Task force to Issue
Final market Directive

Q2
Q1

Q4
Q2

Q3
Q1

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Q4
Q3

Jan 27th, 2023

Dec 2023

Jan 27th, 2023

May 27th, 2024

May 28th, 2024

India Migrates from T+2to T+1

UK Task force to issue
findings

Australia undergoing
Consultation Period

Canada T+2 to T+1
Live Date

USA T+2 to T+1
Live Date

CONFIDENTIAL INFORMATION|© 2023

5T+1 Impact and considerations
Selecting the right external partners can help ensure that the investments the buy side and Sell side are making to achieve T+1 are laying thegroundwork for the next-gen settlement platforms that will ultimately support the move the T+0.

Complex Challenges Require Cooperative Solutions

The shift to T+1 will require additional changes beyond the scope of individual firms. To meet the timetable for T+1 and prepare for next-day
settlement, the buy side will have to work together with the sell side, industry partners and regulators to address issues including:▪ Corporate actions: The move to a T+1 settlement cycle will have a significant impact on how corporate actions such as distributions, tender offers,exchange offers and rights subscriptions are handled in the settlement process. Specifically, it will shorten corporate action event dates, which inturn will have an impact on securities pricing in the event of a corporate action that occurs adjacent to a trade. In addition, there is increased risk
and impact of managing fails, liabilities and claims in a shortened window. Ultimately, it will probably be up to the Securities and Exchange
Commission to adopt reforms that align corporate actions with the new T+1 cycle, and eventually with same-day settlement.
▪ FX markets: Asset managers buying foreign securities need local currencies to settle trades. Accessing the foreign currency in time to meet a T+1or T+0 settlement cycle will be a challenge if FX markets are operating at a slower pace. Synchronizing settlement processes and global FX
markets will require close collaboration among market participants and regulators.
▪ Securities Lending: The compression of the settlement cycle from T+2 to T+1 will reduce the amount of time that borrowers of securities, andlending agents must meet for recall issuances and processing. As that deadline moves up, lenders will have less time to instruct recalls andborrowers will have less time to return securities for settlement, setting the stage for an increase in fail rates. Regulators will have to set new rules
and deadlines that allow the system to function in the shorter cycle, and market participants and technology vendors will have to implement newsolutions to streamline the securities lending process.
▪ Cash and Liquidity management: Cash and Liquidity management will now operate under a compressed timeline requiring faster reporting in near toreal time to remain effective. Considerations on prefunding of securities settlement and FX order management with global coverage either
centralized or decentralized in various locations with execution time and place consideration.

|CONFIDENTIAL INFORMATION|© 20236

T+1 Sell Side Implications and Considerations
Ensuring operational coverage globally in constrained timelines is a key consideration when time becomes an important asset
within global trading.

Trade Capture and Processing

Confirmation and Allocations

Operations Settlement Processing

Reference and Static
Data automation
requirement

Optimisation of Client
Affirmation andConfirmation

Improve matching rates
through increased
automation

Real time trade
allocation

Improved Delivery
Management with Auto
Depo RealignmentMore use of Partial
settlement

Impact on crosscurrency transactions
which have an FX

Reduction of Trade
amends and Latebookings

Confirmed and Matchedat CSD on Trade Date

Enhanced Client
Communication

Understand impact on
STP rates and manual
process

Trade Position Integrityand Reconciliation inreal time

Fails Management

Securities Lending

Corporate Actions

Increased Settlement
FailureIncreased Credit Risk

Reduced timeline forSecurities Lending

Less time to identify andcover short positions

New sequencing of key
dates in the corporate
action calendar

Markets move to Ex
Date equals Record
Date.

Increased cash penalties
under CSDR

RWA implications under
Basel III requirements

Locate, delivery, andsecurity recalls times arecompressed

Potential increase of
Cost of lending

Additional Steps inprocessing as a result of
increased fails

Manual processing
removal a prerequisite

Funding &Treasury ManagementRegulatory

Client Services

Liquidity and cashmanagement requiring
optimisation

Challenges for crosscurrency transactions

Significant Regulatory
ChangeCSDR Rules will Change

Consider Extending
Operating Hours

Consideration for afollow the sun operating
model

Continuous Real time
Funding capabilities
requiredBatch overnight process
elimination

Dematerialization ofSecurities in the UK by2025

Market Infrastructure
Changes Required

Client awareness andbehavioral assessments

Changes to Client SLAs

T+1 will pressurise the industry to get things right on trade date, which means more straight-through processing and less cumbersome or customised processes.
Asia will need to operate on a T+0 basis, with almost no overlap with a European based counterparty' between Trade date and settlement.
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T+1 Buy Side Impact and considerations
Buy Side firms will need to understand the behavioral, structural, operational, and technological change costs to execute a T+1 strategy

The move to T+1 will differ in two important ways:
1.

In a T+1 environment, the previous strategy of throwing additional bodies at manual functions will become problematic. Buy-side firms will simply nothave the time needed to execute essential functions manually. As they transition to T+1, firms will become far more reliant on technology to meet new
deadlines and demands.

2.

Innovation has provided a host of new solutions such as robotic process automation (RPA), artificial intelligence (AI) and enhanced data exchange that
can help buy-side firms automate processes. Much of this technology did not exist or was not widely available during the T+2 transition.
Buy side firms will now need to complete an impact assessment on the implications of T+1 across the trade cycle and identify the changes they will have to
make to technology, operations and control processes. Buy side firms should establish a governance structure and PMO to coordinate the change agenda
across operations, technology, risk and finance.

Considerations
Complete an end-to-end
trade lifecycle
assessment

Complete an end-to-end
process assessment ofCorporate Actions

Real time settlement
status information from
Sell side

Understand the financial
Impact of fails in relation
to CSDR Penalties

Reconciling your default
SSIs with Custodians

Consider capacity tomanage T+1 change

Removal of Legacy
Batch Systems

Increased automation
and a focus on
operational efficiency

Understand impact on
STP rates / Manual
Process

Process Optimization toensure first time
matching on TD

Potential for increased
volatility and priceswings

Changes to Contracts &Legal Agreements|

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Broadridge Professional Services
T+1 Technology & Operations efficiency targeting cost saving and scalability|

CONFIDENTIAL INFORMATION|© 20239

T+1 Technology & Operations efficiency targeting cost saving and scalability
Our Professional Services Approach

Benchmark your Current
Performance

Get Authoritative
Recommendations• Gain a high-level snapshot of yourOperations and Technology performanceacross different dimensions• Capture pain points, risks and issues• Measure your performance against
competitive benchmarks. Do changes inKPIs reflect market trends or needattention?
• Analyse the impact of regulatory or market
events (such as T+1 and ISO20022) andassess your readiness• Discover areas for improvement and assess
suitability of industry-leading Nex Gensolutions• Receive practical recommendations
categorized by dimension and prioritized by
impact and cost|Plot a Road Map Towards
Optimization• Qualify business opportunities and plot aroadmap towards optimization• Understand correct sequencing, key
milestones and anticipate common pitfalls

CONFIDENTIAL INFORMATION|© 202310

T+1 Technology & Operations efficiency targeting cost saving and scalability
We work with our clients to take an end-to-end view of their Operations and Technology backbone across six dimensions

Data &Analytics

Technology• Data Architecture• Batch Processing• Predictive Analytics
and AI• Cloud IT

ProcessOptimization• Catalogue repeatable
activity patterns• Scaling

Automation / STP

ContinuousImprovement

Organization• STP efficiency• Organizational Structure• Manual processing
rationale• Spans and layers• Data visualization• TechnologyIntegration• Data analytics• Testing Strategy• Solution re-use andsynergies• Diagnostics• Data Management• IntelligentAutomation• Duplicate /redundant activities• Data Quality• Digitized Assets• Nature of hand-offs• Standardization• Levels of re-work,
exceptions, failures• Automation• System proliferation• System redundancy
opportunities• Simplification• Incremental improvement
strategy• Capacity Constraints• Promoting employee
engagement in continuousimprovement• Micro managers• Culture of quality• Voice of employee• Attrition• Iterative business casedevelopment• Location Strategy• Rapid prototyping• Sub optimizing silos• Performance, Skill Sets
and Capabilities• Roles & Responsibilities

Operations and Technology Diagnostic Design Framework|

CONFIDENTIAL INFORMATION|© 202311

Broadridge Professional Services

Transformation is mandatory.
Firms need to prepare for what’s next – TODAY.
Gain powerful technical perspectives on what works andwhat doesn’t.

Tap into a wealth of domain knowledge and focused,practical expertise.
Count on our specialists in operations and technology
business consulting, communications and customer
experience, for proven excellence in both strategy andexecution.
You’ll gain trusted resources and accelerate your digitaltransformation and path to competitive advantage.
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CONFIDENTIAL INFORMATION|© 202312

No part of this document may be distributed, reproduced or posted without the express written permission ofBroadridge Financial Solutions, Inc. ©2023 Broadridge Financial Solutions, Inc. All rights reserved. Broadridge andthe Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc.